CMS Administrator Seema Verma announced the 2019 financial and quality results for Accountable Care Organization (ACOs) in the Medicare Shared Savings Program (MSSP) in a Health Affairs Blog post on September 14, 2020. According to Verma, the 541 ACOs in the MSSP generated $1.19 billion in total net savings for Medicare in 2019—the largest annual savings to date. These savings were largely driven by reductions in spending on post-acute care, hospitalizations, and emergency department visits. In addition to achieving savings, most eligible ACOs met quality benchmarks. Significant differences in savings remain, however, between ACOs led by hospitals versus physicians as well as rural versus urban ACOs.
The 2019 results include both ACOs that joined one of the new participation options created under the December 2018 “Pathways to Success” final rule and “legacy” ACOs that remained in existing tracks. As previously reported, the Pathways to Success rule requires participating ACOs to take on “downside” risk for cost increases more quickly than legacy ACOs, typically after two years. In addition, the Pathways to Success rule includes an option for “low-revenue” ACOs—which are typically run by physicians, rather than hospitals—to add an additional participation year before taking on downside risk. Organizations could begin joining the Pathways to Success tracks in July 2019.
Although the results include only the first six months of data for Pathways to Success ACOs, the results generally show that the newer ACOs achieved somewhat higher net per-beneficiary savings than the legacy ACOs. Low-revenue ACOs also generated net savings per beneficiary of more than double those for high-revenue ACOs. Verma indicated that these differences could potentially be explained by differences in services provided—low-revenue ACOs mostly provide outpatient services, while high-revenue ACOs typically provide both inpatient and outpatient services. CMS plans to release additional data on Pathways to Success ACOs in the future and King & Spalding will continue to track developments in this area.
The results also reflect differences in performance between rural and urban ACOs. Historically, rural ACOs have generated smaller savings than urban ACOs. This trend continued in 2019, with rural ACOs generating $64 in net savings per beneficiary and urban ACOs generating $125. Looking at early results from only the Pathways to Success ACOs, however, the margin between rural and urban ACOs was narrower—rural ACOs generated $158 in savings and urban ACOs generated $170.
In addition to savings, most ACOs continue to demonstrate similar, or better, quality results compared to other organization types. Almost all ACOs successfully reported quality data within the quality reporting period, which was extended due to the coronavirus pandemic. Over ninety percent of ACOs earned quality improvement reward points, with the greatest improvements in care coordination and patient safety.
CMS Administrator Seema Verma’s Health Affairs Blog post on the results is available here. CMS’s full 2019 quality and performance data for MSSP ACOs is available here.